WilliamSpain

Deerfield, Ill.-based Walgreen
WAG
earned $669 million, or 68 cents a share, for the three months ended Feb. 28, up from $640 million, or 65 cents, in the year-earlier second quarter. Without a 2-cent restructuring charge, the company would have earned 70 cents a share.

Quarterly sales rose to $16.99 billion from $16.48 billion, but same-store sales -- those at outlets open at least a year -- were off 0.2%, including a 1.6% decline in non-pharmacy sales.

The average estimate of analysts polled by FactSet Research had been for the company to earn 71 cents a share on sales of $17.27 billion.

The company said that front-end, non-pharmacy sales were hurt by weak demand for discretionary goods and also for cough, cold and flu-related products.

"As much as the early flu season helped our first-quarter results, it hurt our second-quarter results," said Greg Wasson, chief executive, in the earnings report.

Still, the latest quarter's prescription sales, which account for 63.3% of the total, were up 3.2% and Walgreen's number of prescriptions filled rose 6% and exceeded by 3.8 percentage points the industry-wide prescription growth rate. Walgreen estimated its retail pharmacy market share at 18.9%, up from 18.3%.

"During the quarter we continued to make progress in executing our key strategies for growth," Wasson said. "We generated significant cash flow, despite the impact of a sluggish economy and lower-than-anticipated sales of flu-related products."

Shares of Walgreen rose about 1% in early trading, picking up from gains of more than 2% on Monday.

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